Israeli-Jordanian trade rises amid misgivings over peace

AMMAN, Jordan, Nov. 1 (JTA) — The last thing a traveler from Israel to Jordan sees before crossing the Sheikh Hussein Bridge are the shiny “golden arches” of a McDonald’s restaurant — a sign of foreign investment Israel enjoyed in the mid-1990s as regional peacemaking progressed. But exactly four years after Israel and Jordan signed a peace treaty on Oct. 26, 1994, the Hashemite Kingdom is showing little sign of benefitting economically from that accord. On a recent morning, only three Jordanian trucks were preparing to enter Israel at the Hussein bridge, the main crossing over the Jordan River for traffic between the industrial town of Irbid in northern Jordan and Israel’s northern port city of Haifa. After crossing the river, visitors to the Hashemite Kingdom are confronted with poor villages, half-completed buildings and idle men on unpaved roadsides, a stark reminder of why most Jordanians are not celebrating this anniversary of peace. Jordanians hoped the accord would help the kingdom end its prolonged economic crisis by attracting foreign investment, tourists and sparking trade with Israel and the West Bank. However, since 1994, Jordan’s economy has deteriorated. Unemployment is believed to be twice as high as the official 15 percent figure, and poverty is rampant. Although peace alone cannot solve these problems, frustrated Jordanians are waiting impatiently for their “peace dividend.” For Jordan, the most pressing issue is access to the Palestinian market. “There are many non-tariff barriers on the ground that make it very difficult” to trade, Abdul Ilah al-Khatib, Jordan’s foreign minister, said in an interview with JTA. “The importance of trade between Jordan and the Palestinians goes beyond financial benefits. It proves that peace is working and providing financial benefits to the people.” According to al-Khatib, Jordan exported about $17 million worth of goods to the West Bank and Gaza Strip in 1997, and about $9 million in the first half of 1998. “These figures fall below our level of trade before the peace treaty,” he said. “We are trying to get Israel to loosen its grip on the Palestinian economy. It is not good politically or economically.” Israel restricts entry of many goods to the West Bank, based on Israeli-Palestinian economic accords that protect Israeli products. Bureaucratic and security measures on the borders are another big barrier. “Maybe there is red tape, like there is anywhere, but blaming us for trying to hold trade to a minimum is unfair,” said Roey Gilad, spokesman for the Israeli Embassy in Amman. Gilad said trade between Israel and Jordan has rapidly climbed from $14 million in 1996 to $32.5 million in 1997, and in the first half of 1998 it jumped by 60 percent to $20 million. Most of this bilateral trade is from Israel to Jordan. He added that economic cooperation secured qualified industrial-zone status for Irbid, allowing duty free exports to the United States for joint Israeli-Jordanian ventures. Joint agricultural projects and plans to open another duty free zone that will straddle the border are also moving ahead. However, one Israeli businessman active in Jordan said the Israeli government and many Israeli companies are not promoting trade with Jordan, since cheaper Jordanian goods are a threat to Israeli firms. Projects that succeed are usually in sectors such as textiles, where struggling Israeli firms profit from low labor costs across the river. The Jordanian government is also reluctant to promote trade amid growing Arab criticism of its “warm” peace with Israel. Jordan’s private sector has not taken strong initiatives, fearing bureaucracy, security and aggressive Israeli businessmen. Despite the challenges, Omar Salah, a Jordanian businessman, has forged several partnerships with Israeli companies. Salah is chairman of Century Investment Group, a holding company that has seven joint ventures with Israeli companies employing 2,500 Jordanians. He admitted that there are problems on the Jordanian side, but laid much of the blame on Israel. Salah rejects criticism from his countrymen of his business ties, but urges Israel to do more. “Politicians in Israel do not realize the true importance of these joint ventures,” said Salah. “People-to-people business ties do more to neutralize hostility than anything else. I’ve hired people who hated Israelis, and their attitude changed completely. People bury the hatchet very quickly.”